California drought expected to push up food prices this year

By Dana Hull
San Jose Mercury News

March 15, 2014 — 5:29pm

Scott Smith, Associated Press - ApAlan Thompson of G&F Agri Service LLC looks at a tree as he manages a crew of heavy equipment operators that removed an almond orchard at Baker Farming Company in Firebaugh, Calif., on Monday, Feb. 3, 2014. The state�s drought has forced farmers to remove some almond orchards earlier than they normally would because they don�t expect to have enough irrigation water. Thompson said the drought hurting farmers has increased his business by about 75 percent.

With 2013 the driest year on record in California and 2014 shaping up to be worse, the ­devastation of drought is trickling down to crops, fields, farmers markets, groceries — and the kitchen table.

While it’s too early to tell precisely how much the drought will push up household grocery bills nationally, economists say consumers can expect to pay more for food later this year because fewer acres are being planted and crop yields are shrinking.

Large grocery chains have distribution networks and can import produce from around the world to keep customers in everything from cantaloupe to cauliflower, but experts say Cali­fornia’s smaller yields will inevitably lead to higher consumer prices there and elsewhere.

California is the nation’s largest producer of many fruits, vegetables and nuts. But with this year’s meager rainy season more than half over, farmers are making hard decisions about what crops to plant and how many acres to leave ­fallow. At least 500,000 prime acres are expected to go unplanted this spring because of insufficient water.

“We’re really concerned about the extent to which acreage is being taken out of action,” said Richard Volpe, an economist with the U.S. Department of Agriculture. “The real economic impact is long-term and will be felt down the road.”

Dave Heylen, spokesman for the California Grocers Association — which represents 80 percent of the grocery stores in California — said the reduced planting may result in a ­limited supply of some produce items at certain times of the year, but that major grocery chains will adapt.

“When I was growing up, when peach season was over, it was over; there were no more peaches,” Heylen said. “Now you can get peaches from South America.”

Besides being the nation’s leading wine and dairy state, California produces 80 percent of the world’s almonds and is a major producer of strawberries, walnuts, celery, leaf lettuce, spinach and cattle. The $45 billion agriculture sector includes 2.6 million acres of permanent crops like almonds and grapes, which allow farmers less flexibility in tough times.

“There will be thousands of acres of fruit and nut trees that will die this year because of lack of water,” said David Sunding, a professor at the University of California-Berkeley. “The reduction in yield will drive up prices.”

With less than hour to spare, the Senate late Friday backed legislation averting a government shutdown as coal-state Democrats retreated on long-term health care benefits for retired miners but promised a renewed fight for the working class next year.